Introduction:
Sole proprietorship and
Sole Proprietorship: An entity which is completely owned by a single person and that person is running the business solely is called sole proprietorship organization. Each and every decision of the organization is taken by the owner and is also responsible for all types of business risks.
Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to establish and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of company, individuals with similar interest join together and startup a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages.
To describe: Advantages and disadvantages of sole proprietorship and partnership.
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Chapter 1 Solutions
FINANCIAL ACCOUNTING: TOOLS FOR BUSINES
- How does running a company as a partnership as opposed to a corporation benefit the parties involved? What are the drawbacks of this approach?arrow_forwardWhich of the following is NOT a form of ownership that the entrepreneur should consider? a. Sole proprietorship b. Limited partnership c. Corporation d. General partnershiparrow_forwardWhat advantages does a sole proprietor offer? What is a major drawback of this type of organization?arrow_forward
- What are the benefits of the corporation in comparison with the partnership and proprietorship structures? How is equity treated and reported differently in this structure?arrow_forwardWhat does it mean to be a company? Instead of forming a partnership, why would the founders of the company choose to do so instead? What are the benefits and drawbacks of forming a company?arrow_forwardWhen it comes to business ownership, how do shareholders vary from partners?arrow_forward
- Explain the advantages and disadvantages of the partnership versus the corporate form of business.arrow_forwardDefine the difference between a proprietorship and a partnership. What are the advantages and disadvantages of a proprietorship and a partnership? (PLEASE DONT PROVIDE PICTURES FOR ANSWER THANK YOU)arrow_forwardWhich of the following legal forms of organization is most expensive to organize? O corporations O limited partnership O sole proprietorships O partnershipsarrow_forward
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